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Course Outline

The Global Capital Markets

  • Defining a 'financial marketplace'
  • Historical evolution of today’s global financial markets
  • The influence of financial media
  • Structure of major capital markets:
    • Exchanges, Clearing Houses, and Regulators
    • The recent surge in global investment
    • Types of 'Stock Exchanges'
    • The role of Stock Exchanges in modern markets
    • US, European, Middle Eastern, and Asian Stock Exchanges

Financial Markets Regulation:

  • Capital Adequacy Requirements
  • Basel I
  • Basel II
  • Basel III and its implications
  • Sources for New Product Development

Asset Classes and Their Markets

  • Current trading activities on Stock Exchanges
  • Equities – Common and Preferred
  • Bonds – Corporate and Government
  • Bonds – Fixed, Floating, and Zero Coupon; The Yield Curve
  • Money Market instruments
  • The currency markets
  • Investor motivations: Buying and Selling drivers
  • Income vs. Capital Gain
  • Interrelationships between various asset classes
  • Interplay between Exchange-traded and Over-The-Counter markets

The Short-Term Money Market

  • Certificates of deposit
  • T-Bills
  • Commercial paper
  • Trade paper & Bankers' Acceptances (BAs)
  • Market norms and practices
  • Market participants

Types of Stock Exchange Investors

  • Individual Investors
  • Fund managers
  • Hedge funds
  • Stock Exchange participants
  • Investment banks, Stockbrokers, Hedge Funds, and Prime Brokers
  • Intra-market relationships – The buy and sell sides of the industry

The Role of the Stock Exchange

  • Where are these products traded?
  • The significance of the OTC market
  • Historical development of Stock Exchanges
  • Major Stock Exchanges in today’s markets
  • US, European, and Asian Markets: Architectural differences
  • Asset classes traded on Stock Exchanges worldwide
  • The major Primary and Secondary markets
  • New York, Euronext, London, Shanghai, Hong Kong
  • Why 'listed' companies attract investors
  • Utilizing Stock Exchanges to pool liquidity and raise capital
  • Methods of Capital Raising
  • 'Floating' a company – Various methods

Clearing & Settlement

  • Settlement and settlement risk
  • Different Settlement Conventions in major markets
  • Equities, Bonds, and derivatives
  • The process for Derivatives Clearing
  • The Central Counterparty (CCP)
  • CCP services provided to Stock Exchanges
  • Margin requirements
  • The securities trade settlement process
  • Pre-settlement
  • Settlement
  • Potential issues – Unmatched trades, delayed settlement, bad delivery
  • Stock Exchange Settlement Discipline
  • The 'trade life cycle' – Connecting the process from trade to settlement
  • The role of International Central Securities Depositories (ICSDs) and Central Securities Depositories (CSDs) – LCH.Clearnet, Euroclear, Crest, Clearstream International, the DTC

Custody

  • The role of Custodians in Stock markets
  • Settlement and safekeeping
  • Income collection and Corporate Actions
  • Cash management and funding transactions
  • Additional services
  • Accounting
  • Stock Lending and collateral management
  • Trustee services
  • Valuation reports

Alternative Investments

  • What are Alternative Investments?
  • Structured products – Risks and returns
  • Hedge funds – Risks and Control
  • Venture Capital Valuation issues, Risk and Control
  • Private Equity/Angel Finance
  • Use of derivatives in Asset Management
  • OTC vs ETD
  • Types of Derivatives used in Asset Management
  • Futures
  • Options
  • Risks and controls associated with derivatives, including documentation, valuation, and reporting

Management of Quoted Equity Investments

  • Risks associated with acquiring securities
  • Risks associated with managing securities
  • Risks associated with corporate actions
  • Pricing of quoted equity investments
  • Major sources of risk
  • General controls within equity investment
  • Risks associated with international equity markets

Management of Quoted Fixed Income Investments

  • Risks associated with acquiring and disposing of fixed income securities
  • Use of ratings and associated risk issues
  • Risks associated with pricing of fixed income securities
  • Risk and controls within corporate fixed income processing
  • Risks associated with Government Securities
  • Sovereign risk ratings
  • Valuation of government securities
  • Risk and controls within sovereign bond processing

Market and Credit Risks of Investing in Global Markets

  • Market risks
  • VAR calculations
  • Market risk modelling
  • Credit Risks
  • Measuring Credit risks
  • Global Market Risks
  • Money Market Risks
  • OTC Risks
  • Exchange risks
 14 Hours

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